By Masaru Ibuka Brenton R. Schlender

(FORTUNE Magazine) – To most of the world, Chairman Akio Morita has always been the star of Sony. But if you ask Morita -- or anyone else at Sony -- the real technical genius has always been Masaru Ibuka, 83, the lanky and unassuming inventor who founded the company amid the ashes of postwar Tokyo. Ibuka, now honorary chairman, dreamed up many of the consumer electronics industry's most successful products -- the pocket-size transistor radio, the home videocassette recorder and camcorder, and, yes, the Walkman. It's no wonder that in Japan, Ibuka is a folk hero, revered much as Americans admire Thomas Edison or Alexander Graham Bell. Although Ibuka retired from active management in 1976, he visits his office at Sony headquarters in Tokyo nearly every week. He still attends product review meetings and the company's annual technology exposition. Not long ago he invited FORTUNE's Brent Schlender to his modest vacation home in the mountain resort of Kuroiso, about 100 miles north of Tokyo, for his first interview with a foreign journalist in nearly ten years. An engaging raconteur, Ibuka reminisced about Sony's early days and reflected on creativity and international competitiveness. Excerpts:

Why did Sony move so quickly into consumer electronics in the late 1940s, even though the Japanese had little money to spend? Before and during the war, I worked on government contracts building broadcasting and military equipment in which the product specification was decided already. I got tired of that because we had no freedom to make improvements or to be creative. We knew that in the consumer electronics business we could pursue any innovation we thought made sense, and if we were right our company would grow much faster.

How did you hit upon the idea of building a transistor radio? I had read about transistors in 1948, but at that time they were unreliable. By 1954 we had hired many technologists. Handling such smart people is one big headache. Working on the transistor was a good way to accomplish two things -- keeping our new people busy and finding a valuable technology. American companies were using transistors to make hearing aids, but even today Japanese don't like to wear hearing aids. So we decided to try to make a transistor radio. The biggest problem wasn't the transistor technology, it was getting suppliers to make special small speakers and other components.

The U.S. has the reputation of being more creative than Japan, yet Japanese companies are far more successful at building products out of new technologies. Why? The American electronics industry is spoiled by the emphasis on military and space applications. In the U.S. you put your energy into fundamental research to develop technologies that you apply first to military uses. Only later does it make its way into business and consumer products. Once when I was in the U.S., I visited a professor who had invented an early big-screen projection TV. I told him it was a natural consumer product, and he became upset with me. He didn't want his superb technology used in a lowly consumer product. In Japan we set a clear size and ease-of-use target for a consumer or business product from the very beginning. The target comes first, often before we have the technology to achieve it. That's why we move faster. I don't agree that we Japanese merely copy American technology. There is much invisible creativity inside our products and in our ways of making them.

What is your favorite Sony product? The Trinitron TV. Why? Because we bet the company on that basic technology, and in 23 years nobody else has been able to match it.

What does the future of high technology hold for the world? High technology has its limits. We will learn that computers, amazing as they are, still cannot come close to being as effective as human beings. There is a spiritual side of the world that is very unpredictable, vague, and abstract, that is the source of human creativity. The computer is only a tool. It isn't creative on its own, and cannot be because it is programmed to behave in a predictable way. Creativity comes from looking for the unexpected and stepping outside your own experience. Computers simply cannot do that.